XTZ

Overview of XTZ

XTZ, or Tezos, is a self-amending cryptographic ledger based on blockchain technology. Founded in 2018 by Arthur Breitman and Kathleen Breitman, Tezos diverges from other blockchain platforms by enabling network protocol upgrades without undergoing a hard fork. Its native token, XTZ, functions within the ecosystem to incentivize network participants in a process known as “baking” for block creation, is a kind of DeFi token. Supported by several exchanges such as Gate.io, Coinbase, Binance, and Kraken, XTZ tokens can be stored in a variety of wallets such as TezBox Wallet, Kukai Wallet, and Ledger Wallet.

Pros and Cons

What Makes XTZ Unique？

XTZ, or Tezos, is unique in that it is designed for Web3, the integration of blockchain into the internet as we know it. This design puts user participation and governance at its core, allowing for direct, frictionless interaction and value exchange on a decentralized network without intermediaries. Tezos aims to make Web3 a truly user-governed innovation.

One of the key distinguishing features of Tezos is its commitment to institutional-grade security. It provides safety and code correctness for high value use cases at both the protocol and application layers. This is facilitated through the use of OCaml and Michelson languages, which aid formal verification often used in critical industries.

Tezos is also unique in its dedication to community governance. It is equipped with mechanisms that enable users to actively partake in evaluating, proposing, or approving amendments, thereby fostering collaborative innovation and keeping Tezos at the forefront of technological advancement.

Tezos' Proof-of-Stake (PoS) algorithm also sets it apart. Requiring less energy and cost to operate than the traditional PoW consensus method, it offers an eco-friendly alternative for building blockchain applications.

How Does XTZ Work？

Tezos operates under a decentralized blockchain network that uses a proof-of-stake consensus mechanism, differing from the traditional proof-of-work mechanism used by cryptocurrencies like Bitcoin. Its unique functionality is highlighted in two main features: the self-amending process and the “baking” procedure.

In the self-amending process, the protocol of Tezos can undergo modifications and improvements through an on-chain governance model without the need for a hard fork (splitting the blockchain). Changes in the system are automatically deployed once they achieve a majority vote from stakeholders. This stands as an answer to the rigid structure of most blockchain protocols that often necessitate controversial hard forks to implement important updates.

The “baking” process, on the other hand, is the Tezos terminology for block validation and creation. In this proof-of-stake system, holders of XTZ (the native token of Tezos) can participate in securing the network. These bakers are responsible for creating blocks and verifying the legitimacy of transactions. Here's how it works: Bakers put up their XTZ as a stake. The higher the stake, the higher the probability a baker is selected to validate the next block. If the baker behaves honestly, they receive a reward in the form of newly minted XTZ.

Exchanges to Buy XTZ

Here are large cryptocurrency exchanges where XTZ can be purchased and the supported pairings on each exchange:

1. Binance: Binance, one of the world's largest platforms for cryptocurrency trading, supports numerous trading pairs for XTZ. Notable ones include XTZ/USDT, XTZ/BTC, XTZ/ETH, XTZ/BUSD, XTZ/BNB.

Buying Link: https://www.binance.com/en/how-to-buy/tezos

2. Coinbase: As one of the most prominent cryptocurrency exchanges in the world, Coinbase supports XTZ and allows trading against major currencies like USD and EUR (XTZ/USD, XTZ/EUR), as well as Bitcoin (XTZ/BTC).

Buying link: https://www.coinbase.com/how-to-buy/tezos

3. Kraken: On Kraken, another popular crypto exchange, XTZ can be traded against several currencies, including USD, EUR and Bitcoin. The supported pairs are XTZ/USD, XTZ/EUR, and XTZ/XBT.

4. Huobi Global: At Huobi Global, XTZ can be traded with BTC and USDT pairs (XTZ/BTC and XTZ/USDT).

5. OKX: OKX supports XTZ trading and offers several pairings including XTZ/USDT, XTZ/BTC, and XTZ/ETH.

How to Store XTZ？

Storing XTZ requires a digital wallet that is compatible with the Tezos blockchain. These wallets can come in various forms, each offering different levels of convenience and security. Here are some types and examples of wallets that can be used to store XTZ:

1. Software Wallets: These are applications that are downloaded and installed on a computer or smartphone. They are convenient for daily use and are often free. However, since they are connected to the internet, they might be at a higher risk of being hacked. Examples include:

- TezBox: This was the first graphical user interface wallet for Tezos. It is an open-source wallet and is available for Windows, MacOS, and Linux. There's also a web-based version of TezBox.

- Kukai: It is a web-based wallet for the Tezos blockchain that allows for direct interaction with the Tezos network. It supports both standard and multisig accounts.

2. Hardware Wallets: These are physical devices designed to securely generate and store private keys offline. They keep your XTZ safe by requiring a physical action (like pushing a button) to confirm transactions. Examples include:

- Ledger: Known for its high-level security features, Ledger device can protect your crypto-assets even if your computer is compromised. It has integrated support for Tezos, which allows users to manage XTZ with Ledger Live, and it also supports baking.

- Trezor: Although not natively supported, XTZ can be stored on a Trezor device by using it along with a compatible wallet interface like Galleon.

Is It Safe？

Tezos is considered a safe cryptocurrency. It is designed with several security features in mind, including:

• Formal verification: Tezos uses the OCaml and Michelson programming languages, which support formal verification. This means that Tezos smart contracts can be mathematically proven to be correct, which helps to prevent bugs and security vulnerabilities.
• Proof of stake: Tezos uses a proof of stake (PoS) consensus mechanism, which is more energy-efficient and secure than proof of work (PoW). In PoS, users stake their XTZ tokens to become validators, and validators are responsible for validating transactions and securing the network. This makes it much more difficult for attackers to take control of the network.
• On-chain governance: Tezos has a unique on-chain governance system that allows token holders to vote on proposed changes to the protocol. This helps to ensure that Tezos remains a decentralized and open-source project.

Tezos has a strong track record of security. There have been no major security breaches since the network launched in 2018. Additionally, Tezos is constantly being updated and improved, which helps to keep it ahead of security threats.

How to Earn XTZ C？

There are several methods to earn XTZ, the Tezos cryptocurrency.

One way is through a referral program, such as Nexo's, where you introduce friends to the world of cryptocurrencies. Each successful referral earns you $25, paid out in Bitcoin.

Additionally, joining Nexo's Affiliate Program grants you a share of revenue each time an invited user earns interest, makes swaps, or borrows funds.

But the intrinsic way to earn XTZ is through staking, as Tezos operates on a proof-of-stake (PoS) blockchain. Users can choose to stake their Tezos tokens, which involves locking these tokens for a certain period and participating in validating transactions on the blockchain. In exchange for this service, users are rewarded with additional Tezos tokens.

Consequently, there are several avenues one can pursue to accumulate XTZ, each suited to different levels of involvement and resource allocation in the crypto sphere.

FAQs

Q: What does the term “baking” mean in the context of Tezos？

A: “Baking” refers to the system of block validation and creation utilized in the Tezos proof-of-stake consensus mechanism, with bakers staking XTZ to participate in securing the network.

Q: What are the most popular exchanges to buy or trade XTZ？

A: Key exchanges where XTZ can be bought or traded include platforms like Binance, Coinbase, Kraken, and Huobi Global, among others.

Q: How can XTZ tokens be stored securely？

A: XTZ tokens can be safely stored in different types of digital wallets that are compatible with the Tezos blockchain, including software wallets like TezBox, hardware wallets like Ledger, and mobile wallets like Trust Wallet.

Q: What future prospects does Tezos have in the cryptocurrency market？

A: While Tezos offers innovative features such as the self-amending process and baking, predicting its future success or market appreciation depends on various market factors and is inherently uncertain.